1. Determinants of provider responsiveness to financial incentives to improve quality and efficiency

Best Practice Tariffs (BPTs) are designed to improve the quality and efficiency of hospital care by incentivising providers to adopt evidence-based care processes. Our previous analysis under the 2016-2017 ESHCRU programme has shown that many BPTs (e.g. those incentivising day case treatment) are, on average, effective in changing behaviour but that hospitals differ substantially in how much they respond to the incentive; with some not responding at all. This implies missed opportunities to improve care, and may imply sub-optimal design of the financial incentives. To date little is known about why providers in the NHS respond differently to financial incentives.

Project aims

We investigate i) whether the speed and magnitude of practice changes incentivised by BPTs is associated with observable hospital characteristics such as pre-policy profit margin, overall budget impact, ownership and practice style; and ii) whether hospitals converge/diverge over time in their adoption of the incentivised processes and so increase/decrease inequalities.